It seems like some posters are willing to disagree on the "should" part (though I personally find it clear), but as far as the "is" goes, the working hypothesis that I have based on what I read of the T&Cs and what posters have experienced is that MR applies the overruling principle of continuity. That is to say, of the stays known to them, which, in the best reading of the data that they have available, is continuous? So, hence, in a nested stay, the shorter is credited because they presume that the longer was non-continuous (and thus the guest did not "stay" in the room all nights booked) by virtue of the existence of the shorter, nested stay.